Nigeria’s private sector credit recorded a major decline after the Central Bank of Nigeria reduced interest rates earlier this year, raising fresh concerns over weak lending to businesses and productive sectors of the economy.
The News Chronicle reports that private sector credit dropped to N80.59 trillion in April 2026 from N94.61 trillion recorded in February, representing a decline of more than N14 trillion within two months.
The latest figures released by the CBN showed that lending activity slowed despite efforts by monetary authorities to stimulate economic growth through a modest rate cut.
While maintaining other crucial monetary policies aimed at fighting inflation and stabilizing the financial system, the central bank lowered the monetary policy rate to 26.5 percent in February.
Analysts think the sharp drop reflects ongoing economic instability, rising borrowing costs, and pressure in the foreign exchange market—all factors that still discourage banks from extending credit to small companies, farmers, and producers.
Financial analysts also pointed out that many banks still favor investing in government bonds, which are regarded as safer and more profitable than private sector loans.
Even if monthly lending fell, private-sector credit remained higher than a year earlier. Nigeria’s money supply kept growing, indicating ongoing liquidity in the banking system even as companies struggle to access funds for growth and job creation.
